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    HomeNewsStockbroker urges gvt to tighten belt as US freezes support

    Stockbroker urges gvt to tighten belt as US freezes support

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    Harare, (New Ziana) – FBC Securities Private Limited, a
    prominent stockbroker, has urged the government to strengthen domestic
    revenue mobilization, improve investor confidence and restructure
    state-owned enterprises (SOEs) in view of an expected reduction in
    external financial support.

    In a statement titled “US Foreign Aid Halt: Impact on Zimbabwe’s
    Economy,” FBC Securities urged immediate government action to mitigate
    potential destabilization of critical economic and social sectors.

    The call for intervention comes in the wake of US President Donald
    Trump’s announcement of the country’s withdrawal from the World Health
    Organisation (WHO) and the suspension of funding to PEPFAR (President’s
    Emergency Plan for AIDS Relief).

    This ban threatens to disrupt vital supplies of anti-retroviral drugs
    (ARVs) and resources for programs addressing HIV, tuberculosis (TB), and
    malaria in Zimbabwe.

    “To mitigate these challenges, the Zimbabwean Government must take
    decisive action by strengthening domestic revenue mobilization,
    restoring investor confidence and restructuring state-owned enterprises
    (SOEs),” FBC Securities said.

    “These strategies are deemed essential for navigating the challenges
    posed by declining external support and ensuring long-term economic
    resilience,” it added.

    The stockbroker also suggested that Zimbabwe seeks alternative funding
    from other international donors, regional partners, and non-traditional
    allies, including the African Union and Southern African Development
    Community (SADC).

    Such partnerships, it said, could provide crucial financial and
    technical assistance, replacing the withdrawn US support.

    Furthermore, FBC Securities reported that NGOs contributed significantly
    to foreign currency liquidity, accounting for 10% and 9% of total
    foreign currency receipts in the first nine months of 2023 and 2024,
    respectively.

    FBC Securities warned that a reduction in these cash inflows would lower
    disposable incomes and consumer spending, particularly impacting
    vulnerable communities in rural areas.

    It predicted a decline in bank deposits in Foreign Currency Accounts,
    foreign currency inflows in general, diminished stock market liquidity,
    and increased volatility in blue-chip stocks because of the US action.

    New Ziana

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